On the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2024/1252

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SHORT JUSTIFICATION

The DEVE Opinion concerns the targeted amendments to the Regulation of the EP and the Council on establishing a framework for ensuring a secure and sustainable supply of critical raw materials (2024/1252), the so-called Critical Raw Materials Act, notably those parts of Article 24 on Company risk preparedness. It transfers from the Member States to the European Commission the identification of large companies covered by the rules under the CRMA, clarification of the aspects to consider for the risk preparedness assessment and mitigation measures, including mapping of the supply chains. In accordance with the proposed amendments, the Commission may request information and clarify further the mitigation measures needed, taking into account information on supply risks, trade flows, potential obstacles to trade in critical raw materials and the shares of reliance on a single third country in the supply chain.

The draft for the DEVE opinion calls for enhanced inter-institutional cooperation to support the Commission in these acts, and to ensure alignment with prior commitments and international agreements. The risk assessment and vulnerability prevention efforts requested from large companies require a conflict-sensitive analysis, and meaningful consultations with stakeholder intervention, notably with local communities and civil society organisations. These are necessary steps to anticipate and address supply chains disruption risks posed by conflicts and crises and thus to secure the Union’s sustainable access to raw materials.

AMENDMENTS

The Committee on Development submits the following to the Committee on Industry, Research and Energy, as the committee responsible:

Amendment 1

Proposal for a regulation

Recital 2 a (new)

Text proposed by the Commission

Amendment

(2a) Due to critical disruption risks posed by conflicts and crises, as well as by environmental hazards, and their consequences on human displacements, the current framework for risk preparedness should be reinforced by conflict-sensitive and environmental sensitive risk analysis.

Or. en

Amendment 2

Proposal for a regulation

Recital 2 b (new)

Text proposed by the Commission

Amendment

(2b) The Commission should promote full transparency and traceability across the entire supply chain to ensure alignment with the EU’s strategic priorities and engagement in resource-rich partner countries and regions, and to secure the Union’s sustainable access to raw materials.

Or. en

Amendment 3

Proposal for a regulation

Recital 4

Text proposed by the Commission

Amendment

(4) Under Regulation (EU) 2024/1252, Member States are required to identify large companies by May 2025 and within 12 months of each update of the list of strategic raw materials pursuant to Article 3(3). Nevertheless, large companies that use critical raw materials can operate in more than one Member State. To avoid a duplication of the identification of these large companies by the various national administrations and to prevent a risk of fragmentation of the Single Market, it should be for the Commission to identify these large companies operating in the Union.

(4) Under Regulation (EU) 2024/1252, Member States are required to identify large companies by May 2025 and within 12 months of each update of the list of strategic raw materials pursuant to Article 3(3). Nevertheless, large companies that use critical raw materials can operate in more than one Member State. To avoid a duplication of the identification of these large companies by the various national administrations and to prevent a risk of fragmentation of the Single Market, it should be for the Commission to identify these large companies operating in the Union. Identification of large companies and their obligations pursuant to the present Regulation should also be informed by European Parliament resolutions.

Or. en

Amendment 4

Proposal for a regulation

Recital 5

Text proposed by the Commission

Amendment

(5) It is essential to strengthen the risk preparedness of the large companies that are identified by the Commission, it is essential that their obligations are strengthened, and therefore large companies should be required to take measures to mitigate their vulnerabilities, including by diversifying their raw material supply chain. The Commission should be able to receive the information regarding their compliance necessary for an effective monitoring and ensure they are prepared in case of supply disruption. The Commission should specify the mitigation measures that large companies should adopt in case of vulnerabilities, it should be able to do so by means of delegated acts.

(5) It is essential to strengthen the risk preparedness of the large companies that are identified by the Commission, it is essential that their obligations are strengthened, and therefore large companies should be required to ensure traceability of strategic raw materials and to take due diligence measures to identify and mitigate their vulnerabilities, including by diversifying their raw material supply chain. These vulnerabilities include long-term risks that outweigh short-term financial costs, such as disruptions to supply chains caused by civil unrest, often resulting from insufficient consideration for local communities and environmental impacts. The applications for strategic projects should ensure that projects do not fuel conflicts and apply the Do No Significant Harm principle, including in the permitting phase. The Commission should be able to receive the information regarding their compliance necessary for an effective monitoring and ensure they are prepared in case of supply disruption. The Commission should specify the mitigation measures that large companies should adopt in case of vulnerabilities, it should be able to do so by means of delegated acts. Mitigation measures should be based on meaningful stakeholders engagement including with local communities and civil society organisations (CSOs), in order to enhance the long-term viability and sustainability of projects.

Or. en

Amendment 5

Proposal for a regulation

Recital 6

Text proposed by the Commission

Amendment

(6) Large companies should, as part of that risk assessment, map where the strategic raw materials they use are extracted, processed and recycled from, and analyse the factors that could affect their supply and assess their vulnerabilities to supply disruptions. In order to have a clear understanding of their vulnerabilities, they should also map the supply chain of the components containing critical raw materials. To reinforce their preparedness large companies should report on their risk assessment to the companies’ board of directors or management board.

(6) Large companies should, as part of that risk assessment, map where the strategic raw materials they use are extracted, processed and recycled from, in order to ensure full traceability, and analyse the factors that could affect their supply and assess their vulnerabilities to supply disruptions. Risk assessment should be based on conflict-sensitive analysis, environmental-sensitive analysis and ensure meaningful consideration for local realities and stakeholders engagement. In order to have a clear understanding of their vulnerabilities, they should also map the supply chain of the components containing critical raw materials. To reinforce their preparedness large companies should report on their risk assessment to the companies’ board of directors or management board.

Or. en

Amendment 6

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) The Commission should continue to monitor the situation and the risk preparedness of large companies, ensuring their readiness in case of disruption of their supply chains. To that end, and when it decides so, the Commission can request information from large companies on their compliance and mitigation measures as required by this Regulation.

(7) The Commission should continue to monitor the situation, and the risk preparedness of large companies, including through continued consultation and engagement with communities and civil society organisations, ensuring their readiness in case of disruption of their supply chains. To that end, and when it decides so, informed by European Parliament Resolutions, the Commission can request information from large companies on their compliance and mitigation measures as required by this Regulation.

Or. en

Amendment 7

Proposal for a regulation

Article 1 – paragraph 1 – point 2 – point d

Regulation (EU) 2024/1252

Article 24 – paragraph 4

Text proposed by the Commission

Amendment

‘4.– If significant vulnerabilities to supply disruptions are detected as a result of the risk assessment referred to in paragraph 2, large companies as referred to under paragraph 1 shall take efforts to mitigate those vulnerabilities, including by diversifying its raw materials supply chains, considering secondary raw materials, or substituting the strategic raw materials.’;

‘4. – If significant vulnerabilities to supply disruptions are detected as a result of the risk assessment referred to in paragraph 2, including conflict, environmental hazards and social unrest, large companies as referred to under paragraph 1 shall take efforts to mitigate those vulnerabilities, including by diversifying its raw materials supply chains, considering secondary raw materials, or substituting the strategic raw materials. Mitigation measures shall, where appropriate, be based on stakeholders engagement including with local communities and CSOs.’;

Or. en

Amendment 8

Proposal for a regulation

Article 1 – paragraph 1 – point 2 – point f

Regulation (EU) 2024/1252

Article 24 – paragraph 5a

Text proposed by the Commission

Amendment

‘5a. The Commission may request large companies referred to in paragraph 1 to explain how they comply with the obligations set out in this Article. They shall provide that information no later than 30 days after receiving the request from the Commission.’

‘5a. The Commission, taking into account resolutions from the European Parliament, may request large companies referred to in paragraph 1 to explain how they comply with the obligations set out in this Article. They shall provide that information no later than 30 days after receiving the request from the Commission.’

Or. en

Amendment 9

Proposal for a regulation

Article 1 – paragraph 1 – point 2 – point f

Regulation (EU) 2024/1252

Article 24 – paragraph 5b – subparagraph 2

Text proposed by the Commission

Amendment

The Commission shall base such risk mitigation measures on an assessment of the available information on supply risks, the trade flows between the Union and third countries, and the potential obstacles to trade in critical raw materials and shall specify the maximum shares of reliance on a single third country in the supply chain of critical raw materials.’;

The Commission shall base such risk mitigation measures where appropriate on stakeholders engagement including with local communities and CSOs and on a conflict-sensitive assessment of supply risks, trade flows, between the Union and third countries, and the potential obstacles to trade in critical raw materials, and shall specify the maximum shares of reliance on a single third country in the supply chain of critical raw materials; the measures shall also take into account strategic partnerships, relevant cooperation agreements, including bilateral agreements, and Global Gateway investment projects relating to critical raw materials in partner countries, as well as information on regulatory risks relating to the respect for environmental, social and governance standards.’;

Or. en